There are no laws which prevent a landlord from renting out a home which is in foreclosure. Once the foreclosure is completed, the prior owner loses his ownership rights, and may not enter into a rental agreement for the foreclosed home or collect rent from an existing tenant, after the foreclosure is completed.

It is okay to rent a home in foreclosure to someone. The problem is that you never know if the owner is in the process of trying to work something out, such as seeking a loan modification, or if they are just trying to collect as much rent without paying the mortgage for as long as possible. There are both state and federal protections for tenants renting foreclosed homes, so generally if a home gets foreclosed the tenant will not be left in a bind, and a new owner might even offer to keep the tenancy going.

If the foreclosure is complete, the "landlord" does not own the property and has no rights to rent it or possess it. If the property is in the foreclosure PROCESS, your landlord still owns the property and can rent it. However you landlord is not obligated to rent to you or anyone else.

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